Sprout Social (NASDAQ:SPT – Get Free Report) issued its quarterly earnings results on Thursday. The company reported $0.26 earnings per share for the quarter, topping the consensus estimate of $0.16 by $0.10, FiscalAI reports. Sprout Social had a negative return on equity of 9.06% and a negative net margin of 6.13%.The firm had revenue of $123.85 million during the quarter, compared to the consensus estimate of $122.19 million. Sprout Social updated its FY 2026 guidance to 1.110-1.150 EPS and its Q3 2026 guidance to 0.290-0.300 EPS.
Here are the key takeaways from Sprout Social’s conference call:
- Q2 results exceeded expectations: Revenue rose 10.8% year over year to $123.8 million, while non-GAAP operating margin expanded 370 basis points to 12.9%. Non-GAAP free cash flow increased approximately 60% to $8.3 million.
- Sprout continued its shift toward larger enterprise customers. Revenue from customers contributing at least $30,000 in ARR grew 20% year over year and now represents more than 61% of subscription revenue, supported by 14.8% ACV growth and stronger retention and expansion trends.
- Early adoption of the AI-powered Trellis platform has been encouraging, with monthly active users growing and customers using Trellis showing higher retention across segments. Sprout also began monetizing the product through the Trellis Plus paid tier and expects AI to support win rates, upsell, and retention over time.
- The company raised its 2026 profitability outlook, forecasting non-GAAP operating income of $68.3 million to $70.3 million, or 20% above the midpoint of its prior outlook. Sprout also expects at least $50 million in annualized cost savings from its restructuring and plans to begin opportunistic purchases under its $50 million share-repurchase authorization.
- Sprout reduced its workforce by approximately 20%, expecting $18 million to $20 million in restructuring charges and acknowledging execution and change-management risks. Management also expects continued pressure from customers below $30,000 in ARR, no material improvement in demand, and a deceleration in that segment to slightly negative growth in 2026.
Sprout Social Stock Performance
NASDAQ:SPT opened at $10.34 on Friday. The firm’s fifty day simple moving average is $7.83 and its 200-day simple moving average is $7.11. The company has a quick ratio of 0.95, a current ratio of 0.95 and a debt-to-equity ratio of 0.15. The stock has a market cap of $621.54 million, a PE ratio of -20.68 and a beta of 0.97. Sprout Social has a fifty-two week low of $4.92 and a fifty-two week high of $16.03.
Wall Street Analysts Forecast Growth
View Our Latest Stock Report on SPT
Key Headlines Impacting Sprout Social
Here are the key news stories impacting Sprout Social this week:
- Positive Sentiment: Sprout Social reported second-quarter revenue of approximately $123.85 million, ahead of the $122.19 million analyst consensus. Adjusted earnings were $0.26 per share, beating estimates of $0.16 and improving from $0.18 a year earlier. Sprout Social Surpasses Q2 Earnings and Revenue Estimates
- Positive Sentiment: Management issued notably stronger profitability guidance: third-quarter adjusted EPS of $0.29-$0.30 versus a $0.18 consensus, and full-year 2026 EPS of $1.11-$1.15 versus expectations of $0.68. Full-year revenue guidance of $493.0-$495.6 million was broadly in line with the $494.4 million consensus. Sprout Social Earnings and Guidance
- Positive Sentiment: The earnings presentation and call emphasized continued growth among larger customers, with subscription revenue contribution from customers generating at least $30,000 in annual recurring revenue rising 20% year over year. AI product investment and customer upselling support the case for stronger monetization and operating leverage. Sprout Social Announces Second Quarter 2026 Financial Results
- Neutral Sentiment: Although adjusted results were profitable, Sprout Social remained unprofitable under GAAP, recording an operating loss of approximately $2.7 million and a net loss of $3.1 million. Operating cash flow was positive at $8.5 million, with $119.9 million in cash and equivalents. Sprout Social Q2 2026 Results
- Negative Sentiment: Recent insider activity remains a potential overhang: insiders reported eight sales and no purchases over the past six months, including sales by the executive chair and CFO. This may raise concerns about insider confidence despite the strong quarterly outlook.
Insider Activity at Sprout Social
In related news, insider Justyn Russell Howard sold 40,000 shares of the business’s stock in a transaction dated Friday, July 10th. The shares were sold at an average price of $8.28, for a total transaction of $331,200.00. Following the sale, the insider owned 7,417 shares of the company’s stock, valued at approximately $61,412.76. The trade was a 84.36% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available at this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. 9.60% of the stock is owned by company insiders.
Institutional Investors Weigh In On Sprout Social
Hedge funds and other institutional investors have recently modified their holdings of the stock. Invesco Ltd. grew its holdings in shares of Sprout Social by 38.6% in the 4th quarter. Invesco Ltd. now owns 76,775 shares of the company’s stock worth $865,000 after acquiring an additional 21,399 shares during the period. State of Tennessee Department of Treasury raised its holdings in Sprout Social by 228.3% during the fourth quarter. State of Tennessee Department of Treasury now owns 38,071 shares of the company’s stock worth $429,000 after purchasing an additional 26,474 shares during the last quarter. EP Wealth Advisors LLC acquired a new position in Sprout Social during the fourth quarter worth $114,000. Mackenzie Financial Corp boosted its position in Sprout Social by 225.9% during the fourth quarter. Mackenzie Financial Corp now owns 126,143 shares of the company’s stock worth $1,435,000 after purchasing an additional 87,434 shares in the last quarter. Finally, Fuller & Thaler Asset Management Inc. purchased a new stake in Sprout Social during the fourth quarter worth $440,000.
Sprout Social Company Profile
Sprout Social (NASDAQ: SPT) is a Chicago-based software company specializing in social media management solutions for businesses of all sizes. The company provides a cloud-based platform designed to help organizations improve their social media presence through a suite of tools for content scheduling, community engagement, social listening and analytics. Sprout Social’s platform is built to streamline the workflows of marketing, customer care and public relations teams by providing a centralized hub for managing multiple social channels.
The company’s product offerings include publishing and scheduling capabilities that allow users to plan and automate social content across networks such as Facebook, Instagram, Twitter, LinkedIn and Pinterest.
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